Thursday, April 26, 2012
Russia and Mexico Both Buy Nearly $1 Billion Worth of Gold in March
Gold’s London AM fix this morning was USD 1,638.75, EUR 1,244.68, and GBP 1,014.83 per ounce. Yesterday's AM fix was USD 1,632.00, EUR 1,240.97 and GBP 1,014.42 per ounce.
Silver is trading at $30.85/oz, €23.43/oz and £19.10/oz. Platinum is trading at $1,550.00/oz, palladium at $671.25/oz and rhodium at $1,350/oz.
Gold fell $3.80 or 0.23% in New York yesterday and closed at $1,638.20/oz. Gold has been trading mostly sideways in Asia and within a narrow 8 point spread. In European trading it remains near the close seen in New York yesterday.
Cross Currency Table – (Bloomberg)
The perfect storm trifecta of bad political and economic news yesterday out of France, Holland and Germany led to risk off and falls in many markets. Gold performed well and was resilient considering the sell off seen in equity markets.
Dutch Prime Minister Mark Rutte speaks in parliament today after tendering his Cabinet’s resignation to break a deadlock over further austerity.
French President Nicolas Sarkozy and Francois Hollande will face off in a 2nd round ballot on May 6th and the prospect of Hollande taking power is making European markets jittery.
The euro region has government debt at 87.2% of GDP last year, which is the highest since the start of the euro in 1999.
Manufacturing data from Europe and China contracted in data released yesterday showing how economic conditions appear to be deteriorating.
With the euro zone political landscape in crisis mode and data showing business contracting many investors are putting their capital in dollars and US Treasuries.
Gold 1 Year Chart – (Bloomberg)
So far gold has not been a prime beneficiary of these risks but this will likely change soon – especially if financial conditions deteriorate which seems very likely.
Gold has recently displayed short term correlations with paper assets such as equities and bonds but these correlations will again be shown to be fleeting as gold’s long term inverse correlation with paper assets will reassert itself in the coming months.
Mexico, Russia and Central Banks Continue Diversifying into Gold
While gold demand from the western investors and store of wealth buyers has fallen in recent months, central bank demand continues to be very robust and this is providing strong support to gold above the $1,600/oz level.
IMF data released overnight shows that Mexico added 16.8 metric tons of gold valued at about $906.4 million to its reserves in March.
Russia continued to diversify its foreign exchange reserves and increased its gold reserves by about 16.5 tons according to a statement by its central bank on April 20.
U.N. Chief Calls for Universal Access to Abortion and Contraception for Teen Girls
United Nations Secretary-General Ban Ki-moon said Monday that millions of girls -- teenagers and younger -- need access to abortion and contraceptives in order to “avoid unintended pregnancies, unsafe abortions and sexually transmitted infections.”
“Sixteen million adolescent girls become mothers every year, and every day, more than 2,000 young people contract HIV,” Ban said. “We have a collective responsibility to drive these numbers down.”
Ban said the nations of the world must provide “reproductive health care” – i.e, access to abortion and contraceptives -- for young people, as well as give them “access to the necessary information and the means to protect themselves from sexual abuse and violence.”
“We cannot ignore the facts. Many young people are sexually active, and because of this, they may face risks to their health, including sexual violence,” Ban said in remarks delivered to the Commission on Population and Development, which opened a week-long session Monday at U.N. headquarters in New York City.
Ban, quoting from a United Nations Population Fund (UNFPA) report, said “an estimated 3 million unsafe abortions took place in developing countries among girls aged 15 to 19 in 2008.”
“Unmet need for modern contraception remains at historically high levels,” the UNFPA report says. “A study shows that more than 60 per cent of adolescent men and women in four sub-Saharan countries did not know how to prevent pregnancy, and more than one third did not know how to obtain contraceptives.”
For the last few years, the U.N. chief has pushed for universal access to abortion for young people, as well as “protection” from early marriage.
The commission, composed of 47 member states, meets annually to discuss population issues and trends in relation to development strategies and policies. The theme of this year’s meeting is “adolescents and youth.”
“Sixteen million adolescent girls become mothers every year, and every day, more than 2,000 young people contract HIV,” Ban said. “We have a collective responsibility to drive these numbers down.”
Ban said the nations of the world must provide “reproductive health care” – i.e, access to abortion and contraceptives -- for young people, as well as give them “access to the necessary information and the means to protect themselves from sexual abuse and violence.”
“We cannot ignore the facts. Many young people are sexually active, and because of this, they may face risks to their health, including sexual violence,” Ban said in remarks delivered to the Commission on Population and Development, which opened a week-long session Monday at U.N. headquarters in New York City.
Ban, quoting from a United Nations Population Fund (UNFPA) report, said “an estimated 3 million unsafe abortions took place in developing countries among girls aged 15 to 19 in 2008.”
“Unmet need for modern contraception remains at historically high levels,” the UNFPA report says. “A study shows that more than 60 per cent of adolescent men and women in four sub-Saharan countries did not know how to prevent pregnancy, and more than one third did not know how to obtain contraceptives.”
For the last few years, the U.N. chief has pushed for universal access to abortion for young people, as well as “protection” from early marriage.
The commission, composed of 47 member states, meets annually to discuss population issues and trends in relation to development strategies and policies. The theme of this year’s meeting is “adolescents and youth.”
CNS
World needs to stabilise population and cut consumption, says Royal Society
World population needs to be stabilised quickly and high consumption in rich countries rapidly reduced to avoid "a downward spiral of economic and environmental ills", warns a major report from the Royal Society.
Contraception must be offered to all women who want it and consumption cut to reduce inequality, says the study published on Thursday, which was chaired by Nobel prize-winning biologist Sir John Sulston.
The assessment of humanity's prospects in the next 100 years, which has taken 21 months to complete, argues strongly that to achieve long and healthy lives for all 9 billion people expected to be living in 2050, the twin issues of population and consumption must be pushed to the top of political and economic agendas. Both issues have been largely ignored by politicians and played down by environment and development groups for 20 years, the report says.
"The number of people living on the planet has never been higher, their levels of consumption are unprecedented and vast changes are taking place in the environment. We can choose to rebalance the use of resources to a more egalitarian pattern of consumption ... or we can choose to do nothing and to drift into a downward spiral of economic and environmental ills leading to a more unequal and inhospitable future", it says.
At today's rate of population increase developing countries will have to build the equivalent of a city of a million people every five days from now to 2050, says the report. "Global population growth is inevitable for the next few decades. By 2050, it is projected that today's population of 7 billion will have grown by 2.3 billion, the equivalent of a new China and an India."
But the sheer number of people on earth is not as important as their inequality and how much they consume, said Jules Pretty, one of the working group of 22 who produced the report. "In material terms it will be necessary for most developed countries to abstain from certain sorts of consumption, such as CO2. You do not need to be consuming so much to have a long and healthy life. We cannot conceive of a world that is going to be as unequal as it is now. We must bring the 1.3 billion people living on less than a $1.25 a day out of absolute poverty. It's critical to slow population growth in those countries which cannot keep up with services."
The report gives the example of Niger in West Africa which has increased life expectancy in the past 30 years but is doubling population every 20 years. "Even assuming its total fertility rate (Tfr) falls to 3.9 by 2050, which may be optimistic, the population will grow from 15.5 to 55.5 million by 2050. A future in which population increase outstrips the production of food and other necessities of life is a real possibility for Niger. It is difficult to see a bright future for the country without sharp reductions in fertility and population growth together with increased investment in health and education," it said.
Most of the global population growth in the next century will come from the 48 least developed countries, of which 32 are in Africa, said Ekliya Zulu, one of the authors and president of the Union for African Population studies. "Taking Africa alone, the population will increase by 2 billion this century. If we fail and fertility levels do not go down to 2.1, (from 4.7 now) the population [there] may reach 5.3 billion. When we slow down population growth we empower women and provide more money for least developed countries to invest in education. The majority of women want fewer children. The demand to reduce fertility is there", he said.
The authors acknowledge that it would take time and massive political commitment to shift consumption patterns in rich countries, but believe that providing contraception would cost comparatively little. "To supply all the world's unmet family planning needs would be $6-7bn a year. It's not much. It's an extremely good investment, extremely affordable. To not provide family planning is an infringement of human rights", said Sulston.
The authors declined to put a figure on sustainable population, saying it depended on lifestyle choices and consumption. But they warned that without urgent action humanity would be in deep trouble. "The pressure on a finite planet will make us radically change human activity", said Pretty.
"The planet has sufficient resources to sustain 9 billion, but we can only ensure a sustainable future for all if we address grossly unequal levels of consumption. Fairly redistributing the lion's share of the earth's resources consumed by the richest 10% would bring development so that infant mortality rates are reduced, many more people are educated and women are empowered to determine their family size – all of which will bring down birth rates", said an Oxfam spokeswoman.
The Guardian
Contraception must be offered to all women who want it and consumption cut to reduce inequality, says the study published on Thursday, which was chaired by Nobel prize-winning biologist Sir John Sulston.
The assessment of humanity's prospects in the next 100 years, which has taken 21 months to complete, argues strongly that to achieve long and healthy lives for all 9 billion people expected to be living in 2050, the twin issues of population and consumption must be pushed to the top of political and economic agendas. Both issues have been largely ignored by politicians and played down by environment and development groups for 20 years, the report says.
"The number of people living on the planet has never been higher, their levels of consumption are unprecedented and vast changes are taking place in the environment. We can choose to rebalance the use of resources to a more egalitarian pattern of consumption ... or we can choose to do nothing and to drift into a downward spiral of economic and environmental ills leading to a more unequal and inhospitable future", it says.
At today's rate of population increase developing countries will have to build the equivalent of a city of a million people every five days from now to 2050, says the report. "Global population growth is inevitable for the next few decades. By 2050, it is projected that today's population of 7 billion will have grown by 2.3 billion, the equivalent of a new China and an India."
But the sheer number of people on earth is not as important as their inequality and how much they consume, said Jules Pretty, one of the working group of 22 who produced the report. "In material terms it will be necessary for most developed countries to abstain from certain sorts of consumption, such as CO2. You do not need to be consuming so much to have a long and healthy life. We cannot conceive of a world that is going to be as unequal as it is now. We must bring the 1.3 billion people living on less than a $1.25 a day out of absolute poverty. It's critical to slow population growth in those countries which cannot keep up with services."
The report gives the example of Niger in West Africa which has increased life expectancy in the past 30 years but is doubling population every 20 years. "Even assuming its total fertility rate (Tfr) falls to 3.9 by 2050, which may be optimistic, the population will grow from 15.5 to 55.5 million by 2050. A future in which population increase outstrips the production of food and other necessities of life is a real possibility for Niger. It is difficult to see a bright future for the country without sharp reductions in fertility and population growth together with increased investment in health and education," it said.
Most of the global population growth in the next century will come from the 48 least developed countries, of which 32 are in Africa, said Ekliya Zulu, one of the authors and president of the Union for African Population studies. "Taking Africa alone, the population will increase by 2 billion this century. If we fail and fertility levels do not go down to 2.1, (from 4.7 now) the population [there] may reach 5.3 billion. When we slow down population growth we empower women and provide more money for least developed countries to invest in education. The majority of women want fewer children. The demand to reduce fertility is there", he said.
The authors acknowledge that it would take time and massive political commitment to shift consumption patterns in rich countries, but believe that providing contraception would cost comparatively little. "To supply all the world's unmet family planning needs would be $6-7bn a year. It's not much. It's an extremely good investment, extremely affordable. To not provide family planning is an infringement of human rights", said Sulston.
The authors declined to put a figure on sustainable population, saying it depended on lifestyle choices and consumption. But they warned that without urgent action humanity would be in deep trouble. "The pressure on a finite planet will make us radically change human activity", said Pretty.
"The planet has sufficient resources to sustain 9 billion, but we can only ensure a sustainable future for all if we address grossly unequal levels of consumption. Fairly redistributing the lion's share of the earth's resources consumed by the richest 10% would bring development so that infant mortality rates are reduced, many more people are educated and women are empowered to determine their family size – all of which will bring down birth rates", said an Oxfam spokeswoman.
The Guardian
Chinese missile launcher export to Pyongyang likely approved by Beijing
China’s export of a mobile missile launcher to North Korea was likely approved by Beijing’s communist government, possibly in response to U.S. arms sales to Taiwan, according to a think tank report made public Tuesday.
The report by the private International Assessment and Strategy Center also says the launcher export raises the prospect that China provided other missile technology for the new mobile ICBM first spotted during a military parade in Pyongyang April 15.
Additionally, the report says the Chinese missile launcher could be powered by a U.S. diesel engine, based on recent sales by the engine manufacturer Cummins to China.
A Cummins spokesman said the company is investigating.
“While China’s motivations for so arming North Korea may range from a desire to pressure the United States to reduce its support for democratic Taiwan to a desire to perpetuate the Kim dynasty dictatorship, the stark fact is that China has brazenly assisted a North Korean missile program with the potential to deliver nuclear weapons as far as Alaska,” states the report, produced by Chinese military specialist Richard Fisher.
“There is little chance this missile technology transfer transpired without the approval of the highest levels of China’s government,” the report said.
The report concludes that by providing nuclear delivery capabilities to a state that has repeatedly sponsored terrorism and proliferated missile technology and expertise, “China is assisting a global nuclear threat.”
“China’s action also stands in direct contravention of 2006 and 2009 United Nations Security Council resolutions (#1718 and 1874) specifically forbidding the transfer of such technology to North Korea,” the report said.
Defense Secretary Leon Panetta confirmed the Chinese launcher support during a House Armed Services Committee hearing April 19. “I’m sure there’s been some help coming from China … clearly there has been some assistance along those lines,” Panetta said in response to questions from Rep. Michael R. Turner, chairman of the House Armed Services subcommittee on strategic forces.
Turner last week stated in a letter to Director of National Intelligence James Clapper and Secretary of State Hillary Clinton that “the prospect of Chinese support for this program, which ‘would require approval from the highest levels of China’s government and from the People’s Liberation Army,’ means that China is enabling North Korea to deploy ICBMs that could be tipped with nuclear warheads aimed at the United States. Such cooperation therefore poses a direct threat to the security of the American people.”
White House spokesman Jay Carney told reporters on Monday that the Obama administration is investigating the missile launcher transfer by Beijing and questioned the government there.
“The United States will continue to work with the international community, including China, to enforce sanctions against North Korea’s ballistic missile program and nuclear program,” Carney said. “And I would say that we’ve raised the allegations with the Chinese government … as part of our ongoing close consultations on North Korea.”
An administration official said that North Korea has a difficult time procuring certain materials, and the Chinese export system is massive and not well organized. “Deals get done with the North Koreans at a local level directly with Chinese businesses that they aren’t necessarily aware of,” the official said.
“We’ve done a lot with the Chinese over the last three years to get them to tighten up on dual use products, and of course on anything prohibited under UNSCRs,” he said. “We assess that the Chinese problem is sanctions enforcement, not willful proliferation. We’ve raised this with them, and will continue to do so.”
Any claim by China that the government was unaware of the export of a strategic missile launcher “begs credulity,” Fisher said.
“The Chinese government is the leading agent in all of its proliferation of missile and nuclear technologies to North Korea, Pakistan, and Iran,” Fisher said.
Fisher said the Chinese-North Korean border is one of the most militarized borders in the world, and it would take the approval of multiple layers of government, military, and police officials on both sides to get six mobile missile launchers into North Korea.
“The only front companies that can make this happen are the ones working directly for the PRC and DPRK regimes,” Fisher said. “Beijing would sooner lose a train of elephants than be unaware of six [transporter-erector-launchers] TELs of the size transferred to North Korea.”
In Beijing, Chinese Foreign Ministry spokesman Liu Weimin said April 19 that China “firmly opposes proliferation of weapons of mass destruction and their delivery vehicles.”
Liu said China strictly abides by U.N. Security Council resolutions, and enforces its domestic export controls. “We have a complete and stringent control system in this regard,” Liu said.
Contrary to the official denial, “China’s historic proliferation behavior—and the obvious fact of this latest sale to North Korea—suggest that there was a direct sale of the [China Aerospace Science and Industry Corporation] CASIC/Sanjiang TELs to North Korea which required the approval of the highest levels of the Chinese government,” Fisher’s report said.
“It is also possible that China’s highest government and military leaders profited personally from this sale of equipment to North Korea,” the report said.
The center’s report stated that days before the April 15 unveiling of the Chinese launcher in Pyongyang, Chinese military web sites posted the first information on the missile launcher, which is produced by a division of the state-run China Aerospace Science and Industry Corporation.
The disclosure was similar to China’s semi-official unveiling of the J-20 stealth jet fighter in late 2010 and early 2011, the report said.
The missile launcher manufacturer, Sanjiang Space Wanshan Special Vehicle Company, located in Hubei, is one of two Chinese companies that produce mobile missile launchers.
According to the report, a brochure produced by the Sanjiang identified the launcher as a WS2600 large vehicle that is a modified version of the WS51200 16-wheel vehicle.
The Chinese vehicle design appears based on a Belarusian MAZ missile launcher that was transferred to China in the 1990s and apparently reverse-engineered by the Chinese.
“It is also apparent that North Korea’s new TELs could be powered by American designed/Chinese manufactured or German manufactured high power diesel engines,” the report said.
One of the online brochures said the WS51200 is powered by the 700hp KTTA19-C700, an engine designed by the U.S. Cummins engine company that is manufactured in and widely available in China.
“Cummins bans all sales of its products to North Korea, and the possibility that one of our commercial products could have been diverted by somebody without our knowledge for such use is very concerning,” Cummins spokeswoman Carole Casto said. “We hope to learn the facts as soon as possible.”
A second CASIC/Sanjiang brochure stated that the launcher is powered by an imported Deutz AG diesel engine, a German vehicle engine manufacturer, according to the IASC report. The launcher also appears to have a German transmission made by the ZF Friedrichshafen AG, which has manufacturing facilities in China.
The report said the Chinese government has not explained how its launcher came to be part of a new long-range missile system.
“A lack of definitive disclosure has caused some to speculate that the TEL or its technology could have been transferred to North Korea as part of a ‘civilian’ deal or that it could have been re-exported from Pakistan,” the report said.
Chinese press reports, however, indicate CASIC received $4.75 million for “super heavy off road vehicles” in 2010 and that vehicles were delivered to an unspecified buyer in May 2011.
The report said additional Chinese missile technology for solid-fuel, rapid-fire engines also might have come from China.
Based on assessments of the new ICBM’s engines, the range of the missile is estimated to be up to 3,720 miles, enough for the North Korean missile to reach targets in Alaska.
“If the KN-08 is indeed a new solid-fuel rocket, then there is a significant probability that it too is a direct sale or technology transfer from China, most likely again from CASIC,” the report said. “There is a precedent for this: CASIC was likely the main source for Pakistan’s solid fuel rockets and their TELs.”
The report warned that there is a real danger that the North Koreans will sell the ICBM launcher and missile to states like Iran.
The proliferation of the new missile means the United States and its allies “face the prospect of China’s network of nuclear proxies all having modern mobile solid-fueled ICBMs.”
“Furthermore, if China’s central role in the creation of this threat is not properly countered, it is possible that such a China-centered network of ICBM-armed proxies could be a reality before the end of this decade,” the report said.
Unless the problem is addressed, Japan, South Korea, and Australia could seek their own nuclear missile capabilities, the report said.
“The longer the U.S. fails to confront a proliferating China, the greater the likelihood that it may have little choice but to support/enable the nuclear deterrents of its allies as the price for sustaining those relationships.”
The report concludes that the missile launcher transfer by China should “end the delusion of an emerging Chinese global power being a ‘responsible stakeholder.’”
“It appears, with its brazen sale of TELs to North Korea, that even Beijing itself has grown tired of its deception efforts,” the report said. “China is most directly challenging freedom and stability on the Taiwan Strait, the South China Sea, and in the regions now threatened by the emerging Chinese-North Korean-Iranian-Pakistani network of nuclear missiles.”
Washington free beacon
France: UN should prepare military option in Syria
France wants the UN Security Council to consider allowing military action in Syria if an international peace plan fails to stop the violence under Bashar Assad’s regime, the French foreign minister said Wednesday.
Alain Juppe’s comments signaled that Paris is increasingly lining up behind a US position laid out by Secretary of State Hillary Rodham Clinton last week. But the prospect of the Security Council backing military action in Syria is remote because veto-wielding members Russia and China are unlikely to go along.
The Syrian government’s crackdown on a popular uprising is estimated to have killed more than 9,000 people over the past 13 months.
The French foreign minister demanded that 300 U.N. observers authorized to go to Syria be deployed within 15 days and said France has all but set a May 5 deadline for Damascus to comply with special envoy Kofi Annan’s peace plan.
“We think this mediation should be given a chance, on the condition that the deployment of the observer mission happens quickly,” Juppe said after a meeting with Syrian dissidents at his ministry. The plan isn’t dead, he said, but “it is severely compromised”
Annan’s scheduled May 5 report on the state of a cease-fire called for under his six-point peace plan will be “a moment of truth: Either this mediation is working, or it isn’t,” Juppe said.
“We cannot allow ourselves to be defied by the current regime,” he added, insisting that Assad’s government has not held to the Annan plan.
Juppe said France has been discussing with other world powers the prospect of invoking Chapter 7 of the UN charter, which allows for action that could be militarily enforceable.
During Paris talks last week by key members of the so-called “Friends of Syria” group, Clinton also mentioned a Chapter 7 resolution despite concern that it would be vetoed by Russia and China. Russia, in particular, has largely defended its longtime ally Syria against the threat of UN sanctions.
The Times of Israel
Britain's economy sinks into longest depression for 100 years
Britain's economy has sunk into recession for the second time in three years after a dramatic slump across the financial services and construction sectors and a poor start to the year on the high street.
Official figures showed the economy contracted in the first three months of the year after a poor performance before Christmas. This meant it registered two consecutive quarters of negative growth, the standard definition of a recession. The economy is now in its longest depression for 100 years, with little sign of regaining its previous record output before 2014.
A silver lining was provided by a CBI survey of the manufacturing sector that pointed to a recovery in sales and confidence, albeit from one of its worst slumps on record in January. And a survey by the British Retail Consortium found an increasing willingness by shop owners to hire workers. More than 3,000 jobs were created, mainly by large supermarkets opening new stores.
But HSBC, Britain's largest bank, offset this news when it announced plans to shed 2,000 staff in its UK retail division over the next year as part of a worldwide redundancy programme. Banks have cut thousands of jobs in the past few years to reduce costs and cope with a sharp slowdown in business caused by the financial crisis and subsequent drop in lending.
The business and financial services sector fell by 0.1% in the first three months of the year. The once all-powerful financial services sector, which accounts for a whopping 29% of GDP, "made the largest negative contribution", according to the Office for National Statistics.
The CBI said it was concerned that poor GDP figures would persuade other employers that a recent improvement in sentiment across several sectors was misplaced, leading them to reverse plans to add jobs and increase investment. Forecasters have pencilled in growth of around 0.8% this year followed by a jump to 2% next year. But several economists argue that, without a rethink of its austerity measures by the Treasury and limited plans for investment, growth could evaporate next year as quickly as it did over the past two years.
After a series of small ups and downs, output has flatlined since September 2010, according to the ONS, shortly after the coalition government took office. Its latest survey of output showed a contraction of 0.2% in the first quarter after a 0.3% decline in the last three months of 2011.
Several European countries have been hit by double-dip recessions following turmoil in the eurozone and the fallout from the Greek crisis. Italy, Spain, France and the Netherlands have all seen growth turn negative in the past six months. Spain, in particular, is expected to remain in difficulty throughout the year as it wrestles with soaring unemployment, rising debt levels and a fall in consumer spending after wage and benefit cuts.
Concern over Spain's future and the possibility it will need a multibillion-euro bailout from Brussels and the International Monetary Fund has weighed heavily on global growth. While the situation in the UK is less acute, the government could face a similar squeeze towards the end of the year once welfare benefit cuts, limits on tax credit payments and persistently high inflation have taken their toll.
Pay rises have lagged behind inflation for more than two years, cutting disposable incomes and hurting high street spending, with a knock-on effect for the Treasury in lower tax receipts. But the US economy has grown strongly. Ben Bernanke, the central bank chief, said on Wednesday that the outlook remained on course for moderate growth, although he cited Europe as a reason to be cautious. The US economy is expected to have grown 2.5% in the first quarter when estimates are published on Friday. The ONS said that Britain's service industries, which make up more than three-quarters of the economy, grew by just 0.1% in the first quarter, after declining by 0.1% in the fourth quarter of last year. Industrial output was 0.4% lower, while construction shrank by 3% – the biggest drop since the start of 2009.
Like the US Fed, the Bank of England has refrained from pumping more money into the economy under its quantitative easing programme, which currently stands at £325bn.
"The biggest surprise – and perhaps the most worrying element of this report – was the disappointment in services output," said Alan Clarke at Scotia bank. "Ironically, construction, which had the most potential to determine whether or not the UK is in recession, proved much less negative than feared. The Bank [of England] recently highlighted that it cares most about underlying growth. Our gauge of underlying GDP showed zero growth – still very disappointing."
The GDP figures conflict with other recent surveys, which have painted a steadily improving economic picture.Economists also question the reliability of the construction numbers. Joe Grice, the statistics office's chief economist, said the bigger picture is that the UK economy, in volume terms, was flat between January and March compared with the same period last year. Looking at the UK since last summer, he added that the picture is of "a flattish economy". Britain is the first major economy to report GDP data for the first quarter of 2012.
The Guardian
Pentagon Halts Class Teaching Anti-Islam Material
The Pentagon has suspended a course for military officers that officials say contained inflammatory material about Islam.
Defense Department spokesman Capt. John Kirby said Wednesday that among problems with the course taught at Norfolk, Va., was a presentation that asserted the United States is at war with Islam. Kirby noted that officials across two American administrations have stressed that the U.S. is at war with terrorists who have a distorted view of the religion.
Kirby declined to detail what he said were other problems with the course, called "Perspectives on Islam and Islamic Radicalism."
Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, has ordered all service branches to review their training to ensure other courses don't use anti-Islamic material.
ABC
22 Red Flags That Indicate That Very Serious Doom Is Coming For Global Financial Markets
If you enjoy watching financial doom, then you are quite likely to really enjoy the rest of 2012. Right now, red flags are popping up all over the place. Corporate insiders are selling off stock like there is no tomorrow, major economies all over Europe continue to implode, the IMF is warning that the eurozone could actually break up and there are signs of trouble at major banks all over the planet. Unfortunately, it looks like the period of relative stability that global financial markets have been enjoying is about to come to an end. A whole host of problems that have been festering just below the surface are starting to manifest, and we are beginning to see the ingredients for a "perfect storm" start to come together. The greatest global debt bubble in human history is showing signs that it is getting ready to burst, and when that happens the consequences are going to be absolutely horrific. Hopefully we still have at least a little bit more time before the global financial system implodes, but at this point it doesn't look like anything is going to be able to stop the chaos that is on the horizon.
The following are 22 red flags that indicate that very serious doom is coming for global financial markets....
#1 According to CNN, the level of selling by insiders at corporations listed on the S&P 500 is the highest that it has been in almost a decade. Do those insiders know something that the rest of us do not?
#2 Home prices in the United States have fallen for six months in a row and are now down 35 percent from the peak of the housing market. The last time that home prices in the U.S. were this low was back in 2002.
#3 It is now being projected that the Greek economy will shrink by another 5 percent this year.
#4 Despite wave after wave of austerity measures, Greece is still going to have a budget deficit equivalent to about 7 percent of GDP in 2012.
#5 Interest rates on Italian and Spanish sovereign debt are rapidly rising. The following is from a recent RTE article....
Spain's borrowing rate nearly doubled in a short-term debt auction as investors fretted over the euro zone's determination to deal with its debts.And Italy raised nearly €3.5 billion in a short-term bond sale today but at sharply higher interest rates amid fresh concerns over the euro zone outlook, the Bank of Italy said.
#6 The government of Spain recently announced that its 2011 budget deficit wasmuch larger than originally projected and that it probably will not meet its budget targets for 2012 either.
#7 Amazingly, bad loans now make up 8.15 percent of all loans on the books of Spanish banks. That is the highest level in 18 years. The total value of all toxic loans in Spain is equivalent to approximately 13 percent of Spanish GDP.
#8 One key Spanish stock index has already fallen by more than 19 percent so far this year.
#9 The Spanish government has announced a ban on all cash transactionslarger than 2,500 euros. Many are interpreting this as a panic move.
#10 It is looking increasingly likely that a major bailout for Spain will be needed. The following is from a recent Reuters article....
Economic experts watching Spain don't know how much money will be needed or precisely when, but some are near certain that Madrid will eventually seek a multi-billion euro bailout for its banks, and perhaps even for the state itself.
#11 Analysts at Moody's Analytics are warning that Italy has now reached financially unsustainable territory....
"Italy is already out of fiscal space, in our estimate." said Moody's. "Its debt levels relative to GDP already exceed a manageable level. The manageable limit for Italian 10-year bond yields is estimated at 4.2pc. As of Wednesday, Italian 10-year yields were 5.46pc."
#12 It is being projected that the Portuguese economy will shrink by 5.7 percent during 2012.
#13 There is even trouble in European nations that have been considered relatively stable up to this point. For example, the Dutch government collapsed on Monday after austerity talks broke down.
#14 The head of the IMF, Christine Lagarde, says that there are "dark clouds on the horizon" for the global economy.
#15 The top economist for the IMF, Olivier Blanchard, recently made this statement: "One has the feeling that at any moment, things could get very bad again."
#16 A recent IMF report admitted that the current financial crisis could lead to the break up of the eurozone....
Under these circumstances, a break-up of the euro area could not be ruled out. The financial and real spillovers to other regions, especially emerging Europe, would likely be very large.This could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse.
#17 George Soros is publicly declaring that the European Union could soon experience a collapse similar to what happened to the Soviet Union.
#18 A member of the European Parliament, Nigel Farage, stated during one recent interview that it is inevitable that some major banks in Europe will collapse....
There are going to be some serious banking collapses and the impact of that on some sovereign states, will be serious. I’m afraid we’ve gotten to a point where we really can’t stop this now. We’re beginning to reach a stage where however much false money you create, the problem becomes bigger than the people trying to solve it. We are very close to that point.When I talk about the threats and the risk that this thing could wind up in some kind of rebellion, some sort of awful social cataclysm, they (other European politicians) are now very worried indeed. They will talk to you in private, but in public, nobody dares utter a word.I think the deterioration, in the last two or three weeks, in the eurozone is very serious indeed. It’s the bond spreads in Italy and Spain. It’s the fact that youth unemployment is now over 50% in some of these Mediterranean countries.It’s riot and disorder on the streets. And yet a month ago I was here and there was Herman Van Rumpuy telling us, ‘We’ve turned the corner. Everything is solved. There are no more problems with the eurozone.’ What a pack of jokers they look like.”
#19 The IMF is projecting that Japan will have a debt to GDP ratio of 256 percent by next year.
#20 Goldman Sachs is projecting that the S&P 500 will fall by about 11 percent by the end of 2012.
#21 Over the past six months, hundreds of prominent bankers have resigned all over the globe. Is there a reason why so many are suddenly leaving their posts?
#22 The 9 largest U.S. banks have a total of 228.72 trillion dollars of exposure to derivatives. That is approximately 3 times the size of the entire global economy. It is a financial bubble so immense in size that it is nearly impossible to fully comprehend how large it is.
The financial crisis of 2008 was just a warm up act for what is coming. The too big to fail banks are larger than ever, the governments of the western world are in far more debt than they were back then, and the entire global financial system is more unstable and more vulnerable than ever before.
But this time the epicenter of the financial crisis will be in Europe.
Outside of Europe, most people simply do not understand how truly nightmarish the European economic crisis really is.
Spain, Italy and Portugal are all heading for an economic depression and Greece is already in one.
The European Central Bank was able to kick the can down the road a little bit by expanding its balance sheet by about a trillion dollars over the last nine months, but the truth is that the underlying problems in Europe just continue to get worse and worse.
It truly is like watching a horrible car wreck happen in slow motion.
The good news is that there is still a little time to get yourself into a better position for the next financial crisis. Don't leave yourself financially exposed to the next crash.
Sadly, just like back in 2008, most people will never even see this next crisis coming.
So do you have any other red flags to add to the list above? Please feel free to post a comment with your thoughts below....
Economic collapse
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